What a week! I had the opportunity to work with five different Buyers this week – with one couple traveling from Orlando, Florida to view Reno properties. Through this week’s clients I showed numerous properties; wrote three offers; and had two accepted. The one offer that was not accepted was but one of seven offers in a multiple-offer situation on a bank-owned property. In that scenario my client came in with an offer at 12 percent above list AND STILL WAS OUTBID!
The Buyers are out there and picking up properties. I wouldn’t call it a buying frenzy, but I, as well as many agents in my office, have never been so busy. In the Reno-Sparks market more homes were purchased in the month of December than in any other December on record. January’s units sold was the 2nd-highest number for a January. And, at the moment February sales look to be shaping up quite nicely for a February.
So who are these Buyers? Looking at the clients with whom I have been working, I see them split roughly evenly between investors picking up income-producing properties or homebuyers purchasing a home in which to live.
So why so much buying activity in the recent weeks? My homebuyers cite:
- the great deals available on very nice homes
- low interest rates, and more importantly, the expectation that mortgage rates will rise
- and concerns of inflation
My investor clients tell me:
- bargain-basement prices
- …hence the ability for the property to pencil and provide an attractive return
- diversification of their portfolios
- and concerns over inflation
And it looks like the buying isn’t confined to only residential properties. As we heard this week the Montage Condominiums got a new owner, and the Grand Sierra Resort is getting new owners.
Get out and enjoy the snow this weekend. …my clients from Orlando sure are.
Calliber
Funny thing. My neighbors are now in Florida, near Orlando, looking to buy a couple of investment properties. Why Orlando? They say prices in Florida are bargain basement and pencil out for positive cash flow, and will be good inflation hedges.
I guess the deals look better when they are 3000 miles away as opposed to across town….:)
Carney
Not really surprising. Florida and Nevada had enormous bubbles. Clearly there are some deals out there now in both places.
The best deals in Nevada, however, are not in Reno. They are in LV. Las Vegas was Ground Zero for the housing bubble, and there are properties in LV that are now selling for 75% off of 2006 Prices. My brother is in escrow on a condo at Lake Las Vegas for $195K that sold for $805K in 2006. And this is not anything unusual in Vegas now.
Sully
Guy, specific details aren’t necessary – however some general price ranges would be nice. I mean, how many investors are buying those 4,5 or 600K houses? Is it more likely they are in the 100 – 180K range, like everyone else? From the information I can gather via realtors, ‘investors’ aren’t looking much above 180K and ‘homebuyers’ aren’t lining up outside very many south Reno area homes.
Carney
Just look at the stats Sully. 92% of all sales are under $300,000. 95% are under $500,000. 50% are under $160,000.
Guys post is not news to anybody paying attention. Sales volume is up, and prices are still falling. All the activity is at the bottom end of the market.
E.Edward
Well of course,
These banks are no dummy’s, there gonna keep these few buyers hungry and trickle out the inventory, Now I wonder if these buyers are aware of the supposedly 9000+ bank held nevada homes releasing ?
The good ol “Rates are go-en up better lock-in” still works like a charm ?
Hey…… inflation, rate increase, That’s gonna be the worst thing for the delusional home appreciation hopefuls. are we not in the 27th month +or- of 0% percent fed rates? Party’s just about over.
…… and to imagine if you were one of these lucky buyers that bought between 2004-to present day there’s probably a 90% chance your upside down in your investment?
….Yaa count me in were do I sign.
I guess with all of the future doom predictions the “local market needs a little boost” was in order?
just my thoughts
bob_c
300k is the new 450k
bob_c
No-one wants cash—-so some may be trickling down from the parobolic rise in commodities, due to the losses one sustains in an inflationary environment when holding cash with Fed holding rates at 0.25 (for 27 months).
Homes are still underperforming every other kind of hard asset, but inflation rises all boats.
It is my opinion the Fed will continue QE for the foreseeable future…..(QE2 ends in June) and either inflation accelerates or the economy starts collapsing.
These are dangerous times…..and the Fed is trying to buy time for real policy changes to be enacted. 2008 didn’t create enough impetus to make massive policy change, so my bet is that we have to do the ‘near collapse’ again (we have to repeat 2008) to inspire the real change that leads to fiscal responsibility and then jobs.
Reno #1
Hey, what’s with all the doom and gloom?? Reno is #1 on a recent government report (see page 29)!!!
http://www.fhfa.gov/webfiles/19810/4q2010HPI.pdf
HyerByer
Buyers galore? How about “Buyer’s Beware?”
I just came within 10 days of closing only to have the bank appraisal come in $30,000 under contract price. Seller’s agent requested a private appraisal. Predictably, seller’s private appraisal came in at contract price. The deal fell through because the seller & agent refused to accept reality. When are seller’s in the $300+ range going to accept reality?
MikeZ
Hyer – you came within ten days? Did you sign the PSA without first getting your own independent appraisal?
The way people here buy houses amazes me. I can’t imagine sitting down at the closing, with $n00,000 on the table without 1) my own attorney having already reviewed all the closing documents, 2) my own attorney present at the closing. Yet I’m told that happens all the time, here in Reno.
Sully
MikeZ, out of curiosity why do you need an attorney?
MikeZ
Reno #1 … thanks for the link to the FHFA HPI report. It’s loaded with data. I hadn’t seen that until you posted.
MikeZ
Sully: I want someone who can advise me on the implications and consequences of every clause and decision. E.g.: How do I know if I want to give up water rights or not?
There are also last-minute changes that require good legal advice: 1) I’ve had a builder miss the deadline for completion (my very first house) and threaten to just ignore the PSA, 2) I’ve had a seller offer what seemed like much more favorable terms at the closing, but it could have been a sucker’s offer.
On my attorney’s advice we 1) closed the day before my rate lock expired and the builder gave back a chunk of money and 2) accepted the seller’s new terms.
Those kind of decisions require sound legal advice. I think the cost of an attorney is well worth it, as insurance. There’s too much money at risk.
Carlo
“present at the closing”….
In the standard practice here in Washoe County there is no “closing” in the sense that all the parties are assembled at the same time at the same place. Typically the seller goes to the title company office and signs all the docs, and then at a different time the buyer goes in and signs all the docs.
Certainly both sides can have an atorney review all the docs before signing them. The practice of an actual “closing” where buyer and seller and their lawyers are present (along with the lawyer for the lender , if there is one) all together is common in some eastern and southern states, but not here.
Rory
Guy submits his first hand account and posters from out of the woodwork pounce on his good news with more Debbie Downer nonsense. GEEZUS H KRIST, let us have a few breaths before you bears go on your predictable tirades. Not saying you bears don’t have points, you do, but don’t you grow weary of beating the dead horse that is the Reno housing market? OI VE!
Zen
Rory,
Maybe this will make you feel better:
http://www.rgj.com/article/20110225/BIZ/110225055/-1/CARSON/Foreclosure-numbers-rise-in-Reno-Sparks-fall-statewide-and-in-Clark-County
Rory
Zen,
NOt really but thanks for trying.